Two of Europe's biggest chip developers may be working with the European Central Bank (ECB) to include tiny radio transceivers in high-value euro banknotes.

According to well-respected trade paper Electronic Engineering Times, Dutch firm Philips and Germany's Infineon are looking into how they could make a chip and antenna cheaply enough to embed in 200 and 500 euro notes.

The idea would be to allow notes to be interrogated by special devices at tills, which would sound the alarm if a note was found to be stolen or counterfeit.

The huge bulk of new currency washing across Europe - 14.5bn new notes, with 10bn making an appearance immediately on 1 January - is seen as a gift to counterfeiters.

Forging ahead

The ECB fears that the euro could supplant the US dollar as the world's most faked currency.

It said it was considering the issue, but would not comment on the technologies it was examining.

Both companies admitted they had looked into the general possibilities of putting transceivers in currency.

But they refused to comment further, telling EE Times that they were covered by strict non-disclosure agreements.

Mass production

In any case, at up to $1 the devices are still probably too expensive to include in banknotes - although the cost might be reasonable for high-ticket bills, the most attractive to counterfeiters.

And, as yet, no-one has worked out a robust enough way of mass-printing the devices into banknotes.

And a note with a chip that will still work after it has been through the laundry probably remains some way off.